Kazakhstan and a consortium of Western oil companies developing the Kashagan oilfield signed the final agreement on the future of the project on Friday after more than a year of tense negotiations.
Despite the better than expected figures, Royal Dutch Shell shares fell more than 3%, in part because of lower than expected production.
Royal Dutch Shell's third-quarter profits ballooned by 71 per cent to $10.9bn (£6.7bn), the company said yesterday, reigniting outrage that energy companies are cashing in while inflated oil prices punish consumers.
Along with the rest of the market, Shells share price has nosedived recently. Nevertheless, investors scouting for value in beaten-up blue chips could do worse than take a second look at this FTSE stalwart.
Practically speaking, therefore, it is easier for Shell to ease off in Canada during a period of uncertainty than in many other countries.
Even as Exxon Mobil Corp. and Royal Dutch Shell PLC reported another round of enormous profits Thursday, Shell said it will postpone the expansion of a big energy project, in a sign that plunging crude prices and high costs are raising concerns among executives of the world's largest oil companies.
The move is the latest in a line of project deferrals among companies active in squeezing crude from Alberta's bitumen-soaked soil in a trend that is dimming Canada's energy production outlook.
A final decision on investing in the second phase of Athabasca in Alberta was due next year, but Shell chief executive Jeroen van der Veer said yesterday that approval had been delayed indefinitely. "We wait for costs to cool down before any new investment decisions," he said.
Now, under Jeroen van der Veer, the stickler for asset efficiency installed in 2004, Royal Dutch Shell has become a metronomic earnings machine, beating consensus forecasts for nine straight quarters.
Royal Dutch Shell has delayed a planned investment in Canada's oil sands, in the latest sign of companies adjusting their plans to reflect the global economic downturn and the fall in the price of oil.
Royal Dutch Shell Plc (RDSa.L: Quote) said on Thursday that it would delay its investment decision on a second expansion of its Athabasca oil sands project, the latest deferral sparked by falling energy prices and a global financial crisis.
Exxon Mobil Corp. reported a 58% increase in third-quarter net income, smashing its own record for quarterly profits, amid a $1.62 billion gain and high oil prices.